Further Delays on NAMA

When the NAMA bill was being debated in the Dail last Autumn, the public was regularly told that the plan was to have the first tranche of loans transferred by the end of last year. Today’s Sunday Business Post reports that further delays are now expected due to delays in preparations at the banks and due to the absence of clearance from the European Commission. The story reports that a verdict from the Commission may not come until the end of February at the earliest.

Stories such as this and this from the today’s Sunday Tribune also make it clear that it is going to be very difficult to attract private funds to the banks. At this point, it is perhaps a legitimate question to ask whether events have not overtaken the whole NAMA-Long-Term-Economic-Value strategy to keep the banks out of some form of temporary nationalisation.

Globalised Ireland

The Irish Times and other media today carried a report on the publication of a new globalisation index produced by Ernst & Young which places Ireland third on the globalised states list. The EY index joins an increasingly crowded field, so what follows is a bluffer’s guide to globalisation indices. As always, a good starting point (but never more than that) is the relevant Wikipedia entry.
Continue reading “Globalised Ireland”

External Imbalances and Fiscal Policy

In this new IIIS Discussion Paper, I discuss the potential role of fiscal policy in stabilising the external account.  The main focus is on the management of imbalances within the euro area; I pay particular attention to the Irish situation.

You can download the paper here.

Civil Servant U-Turn Explanations Getting Worse

I noted a few days ago that the government’s justification for the U-turn on pay cuts for senior civil servants was to cite the international benchmarking carried out for the Review Body report that recommended the cuts in the first place. This seemed an unsatisfactory defence of this controversial decision.

Yesterday in the Dail, the Tanaiste put forward a new justification for the decision (link to Dail transcript here). The Tanaiste said “With regard to the pay and conditions of assistant secretaries, the review body on higher level pay indicated that the bonus was indicatively part of their salary.”

If I understand the argument correctly, the Tanaiste is saying that the Review Body’s report indicated that the salary that it was recommending be cut included the bonuses, in which case the government was not actually implementing the report’s recommendations in the first place but that policy was now consistent with the report because of the U-turn.

Well, here’s the Review Body’s report. It’s not that long and I’ve read it a couple of times. And as far as I can see, the Tanaiste’s claim is, well (… looking for polite term for it) not correct. I can’t find anywhere in the report where it says that the bonus was explicitly, implicitly, or, indeed, indicatively included in the baseline salary recommended to be cut.

In fact, there’s pretty solid evidence that the Review Body was explicitly excluding bonuses from the salaries being considered: The “current rate” salaries cited on page 5 of the report are base salaries excluding bonuses. This doesn’t seem to leave much room for the idea that the Review Body was including bonuses as part of the salary to be cut, whether indicatively or otherwise.

Is it really too much to ask for a for a simple and honest explanation for this decision, i.e. one that doesn’t rely on misrepresenting the report that recommended the cuts in the first place?